How to get funding for my startup

There are more than 4,115 startups in Spain, and their creation is constantly growing. However, one of the main difficulties of startups is access to finance. Our country is full of innovative, creative people who are eager to undertake, but sometimes they may find themselves far from implementing their ideas due to lack of money. Although funding channels vary depending on the type of business and needs of each project, there are many possibilities for obtaining funding, more than ever! It is true that it is very important to know the different options we have to finance a project, but we must also have a solid business model and know the steps to take to transform our idea into a profitable and scalable business. Once we have this, here are the main ones ways to finance your startup.

1. Own funding

At the beginning of every project and to launch an idea (starting the business activity, registering the trademark, setting up the entity, etc.), Funding is needed. The current funding channels for a startup are personal and team savings and FFF or 3F (Friends, Fools and Family). The first way to obtain funding is with our own money. The founding members or team members of the future startup will invest part of their savings in their own project. This will help in the beginning and will show that we believe in our idea: If you believe in your project, many other people will also believe in it.

2. FFF or 3F (Friends, Fools and Family) funding

This start-up phase is very early and often the business model has not even been validated. For this reason, The risk is high and entrepreneurs and entrepreneurs will generally go to people you trust that they bet on their idea when there are still no guarantees. These investors are usually friends, family members or other people who assume such a risk and allow you to put your idea to the test.

3. Incubators and accelerators

Incubators and accelerators support startups in its early days. Las accelerators help newly created companies to grow quickly and in a structured way, while incubators attract entrepreneurs and provide them with ideas and resources. They offer workspaces, mentoring, training, funding and/or access to their investor networks. They are a good option for acquiring expert knowledge, improving various areas of the startup and business strategy, and expanding the range of opportunities available for growth. For example, Santalucía IMPULSA is a corporate acceleration program for innovative projects specialized in Insurtech, promoted by Grupo Santalucía, for entrepreneurs and startups under 5 years old. The program offers a unique acceleration process and the opportunity to proactively seek collaborations and alliances with Santalucía.

4. Crowdfunding

El crowdfunding or crowdfunding It is a way of crowdfunding, that is, a group of people financially supports a project. The entrepreneur receives donations from investors, usually in exchange for some type of consideration related to the project (such as the product whose development they intend to finance, its free use, merchandising...). It is an effective form of financing that is one of the main alternatives for raising capital through the Internet; there are numerous online platforms that facilitate contact between both parties.

5. Business Angels

Los Business Angels they are individuals with investment capacity and extensive knowledge in specific sectors, who provide not only their money, but also his experience And their contacts. They have a good eye for business and are constantly looking for projects. These private investors drive the development of scalable business projects with high growth potential in their early stages of life and help to cover the lack of funding faced by entrepreneurs in the early stages of life. They are associated with high levels of risk and lack of liquidity; they usually enter when the project is already minimally launched and there are clear data and the first transactions and revenues have been obtained. The main difference with traditional and venture capital investors is their involvement in the management of the company.

6. Venture Capital or Venture Capital

The entities of Venture Capital or Venture Capital are investment or investment companies that specialize in investments that They finance mature startups, large projects with great capital needs to continue growing. The numbers are higher than Business Angels and there is the support of entities with a lot of business experience, but the conditions are stricter and more complex.

7. Participatory loans

Los participatory loans they aim to promote the creation of viable business projects with prospects for growth and consolidation. It usually has fairly affordable access requirements and your interests are linked to the company's results. The latter means that the financial burden that the company will bear will be adapted to its own activity.

8. Other

As we said at the beginning, there are numerous different forms of get funding for your startup. We have written you some of the most important or main ones, but there are many more. Remember to be well informed about the options available to your company and to know the needs of your startup to cover them in the best possible way and at the right time. Other ways to raise capital for your startup they are, for example, bank financing, grants, participations, confirmations, partners, crowdlending, factoring...